MALL Developer SM Prime Holdings Inc. is planning to borrow between P3 billion and P3.5 billion to help finance its mall expansion in 2008, Philippine Daily Inquirer sources said.

SM Prime is earmarking P6-P7 billion for capital expenditure next year to build new malls in Marikina, Calamba in Laguna, Tarlac and Naga. SM Investments Corp. chief finance officer Jose Sio said in a recent SMIC briefing that SM Prime had been looking at the possibility to fold in the Sy family’s malls in China into SM Prime.

An announcement may be made in the fourth quarter after the completion of a study being undertaken by certain foreign banks. SM Prime is a subsidiary of Sy flagship company SMIC.

For the rest of 2007, SM Prime is scheduled to open SM City Taytay and SM Supercenter Muntinlupa. The expansion of existing malls are ongoing, namely, SM City Cebu–Annex and SM City Pampanga. Also, the construction of the Science Discovery Center at the SM Mall of Asia and the Sunset Strip at the Esplanade of SM Bay City is also underway.

These projects are expected to be opened in September this year. By the end of 2007, the total gross floor area of all SM Prime malls is seen to reach 3.9 million square meters. SM Prime posted a 22-percent year-on-year increase in gross revenue for the first half of 2007 to P7.5 billion.

Net income stood at P2.9 billion, up 11 percent compared to year-ago. First half 2007 rental revenue, which accounted for 82 percent of the total, grew by 22 percent to P6.2 billion, as SM Prime benefited from the new revenue stream from last year’s new malls including the SM Mall of Asia, which turned a year old in May of this year.

Other malls that opened last year were SM City Sta. Rosa, SM City Lipa, SM City Clark, SM Supercenter Pasig and The Block which is a mall extension of SM North Edsa. This year, SM Prime opened SM City Bacolod.

These malls have an average occupancy rate of 98 percent. Combined, they provided an additional 800,000 square meters of gross floor area, bringing the total to 3.6 million square meters, for all 28 SM Prime malls nationwide.